Business reporter

The broker who allegedly blew the whistle on the $7 million ABS insider trading scandal says he was sacked after alerting the regulator to suspicious trades, documents filed in the Federal Court show.

Joel Murphy was running the sales division of foreign exchange broker Pepperstone Financial when he says he became aware of suspicious trading involving two clients, 26-year-old NAB employee Lukas Kamay and 24-year-old Australian Bureau of Statistics worker Christopher Hill.

He is now suing Pepperstone and its directors, Owen Kerr and Joe Davenport, for unfair dismissal, based on allegations he was fired shortly after alerting the corporate regulator.

Charged: Lukas Kamay.

The tip-off to the Australian Securities and Investments Commission about Mr Kamay and Mr Hill lead to a sting operation by the Australian Federal Police and blew open one of the biggest insider trading cases in Australian history.

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Mr Kamay and Mr Hill have been charged with serious offences, including insider trading and money laundering, with a committal mention due in the Melbourne Magistrates Court later this month.

Mr Murphy claims he reported the trades to ASIC in February when he was working as head of sales for Pepperstone.

In May, his contract was terminated on the same day news broke of the scandal.

Documents show Mr Kerr told Mr Murphy his contract was terminated due to "global FX market volatility being at record lows ... and the entire FX trading market contracting".

"Regrettably this means your employment will terminate," a letter dated May 9 said.

He said efforts had been made to move Mr Murphy to other parts of the company, including its China office, but "due to language ability it proved untenable".

Mr Murphy is seeking damages of $904,779 based on bonuses he says he was owed for the period.

His lawyer is claiming his complaint to ASIC falls under whistleblower protection rules in the Corporations Law, which forbids an employee from being sacked on the basis of a disclosure.

Pepperstone is yet to file a defence, and Mr Kerr did not return calls on Friday.

The AFP arrested Mr Kamay and Mr Hill in May after monitoring foreign exchange trades made by Mr Kamay through his account with Pepperstone.

The police have alleged Mr Hill, who worked at the ABS office in Canberra, sent unreleased employment, trade and retail data to his friend Mr Kamay at NAB in Melbourne.

The pair allegedly used the sensitive information to predict fluctuations in the Australian dollar, reaping $7 million in the process.

Mr Kerr told Fairfax Media in May that Pepperstone had been in co-operating with the AFP since becoming aware of the suspicious trades.

He told The Australian Financial Review that he had twigged something was awry when he was handed information from someone in his client services team in September.

He reportedly then rang ASIC to report the allegations and was referred to the AFP.

The claims follow a Senate committee report into ASIC's failings in responding to whistleblower claims in the Commonwealth Bank financial planning scandal.

The report called for a series of major reforms to Australia's corporate whistleblower protections.

It said the laws should be expanded to make it a criminal offence to threaten or to take reprisals against whistleblowers.